One of the most crucial ideas in macroeconomics is understanding that:
A. zero unemployment is the best way to achieve economic growth.
B. measuring total expenditures or total income both equal total production of an economy.
C. prolonging economic downturns can be prolonged by fiscal policy.
D. GNP is the most commonly used measurement of total production.
B. measuring total expenditures or total income both equal total production of an economy.
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During periods of poor economic performance, real GDP
A) declines and unemployment declines. B) is unchanged but unemployment rises sharply. C) declines and unemployment rises. D) declines but unemployment typically does not change.
A payment to an owner of a resource in excess of its opportunity cost is know as
A) real wages. B) economic rent. C) financial interest. D) accounting profits.
Ceteris paribus means
A) "all variables are independent." B) "other things being constant." C) "some assumptions are unrealistic." D) "some theories are not rational."
If the Fed buys a T-bill from an individual rather than from a bank, the effect on the money supply is
A. smaller because there is no multiplier process. B. larger because of the multiplier process. C. the same. D. impossible to predict without knowing the value of the multiplier.